Bosses ‘regret’ Deutsche doughnuts

A quarter of the bank's staff will not get a traditional part of their bonus for 2016

Ben Phillips

By

Elizabeth Pfeuti

January 18, 2017 Updated: January 26, 2017 6:11 p.m. GMT

The board at Deutsche Bank has confirmed that a quarter of its staff can expect cuts to their bonuses this year, partially thanks to a settlement with US authorities over mortgage securitisations prior to the financial crisis.

In a memo, chief executive John Cryan and the ten-strong executive committee, told staff that the move to curb senior employees' payments it was "not a decision we have taken lightly".

The memo said that due to a "clearer idea of the financial impact of the settlement with the US Department of Justice, and our performance for the year", tough measures were "unavoidable".

It cited "thousands" of job cuts and shareholders not receiving a dividend.

"The management board has therefore decided to substantially limit bonus payments for 2016," the memo said. "In concrete terms, this means that employees with the corporate titles of vice president, director and managing director will receive the group variable compensation component but not any individual variable compensation component for the 2016 financial year."

The decision affects 25% of the bank’s staff, some of whom - cited as a "limited number of employees in crucial positions" - will be awarded long-term incentives, partly in the form of shares, that may be deferred for up to six years.

The memo said the board realised many would be disappointed by the decision, and said it had "decided unanimously to waive its variable compensation for 2016".

"We know how hard you work for the bank," the memo said. "We recognise how committed you remained throughout the challenging days in the autumn – and indeed not only then. Today we are able to say that our bank is resilient thanks to your hard work and dedication. Unfortunately, this recognition will not be reflected in the amount of individual variable compensation this year. We sincerely regret this."

The memo outlined that this position on bonuses was temporary and the bank planned to return to "normal compensation programs for the year 2017".

It concluded: "Let's work together to return Deutsche Bank to the respected and successful position that it rightly deserves."